very nice!
do you have more details (src, schematic) on how you did it?
I purchased some 'helper chips' that would do a lot of offload and send in a single analog signal that would correspond to each of the 7 or so bands. are you using one of those chips or is this all in atmel space?
looks good, at any rate.
also, are you being strict to the VU meter specs? rise and fall time decays and such?
cool, man. nice stuff.